Ford Pauses $3.5B EV Battery Plant Plans Amid UAW Protest

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In a strategic deviation, Ford Motor Co. has shelved work on a proposed $3.5 billion EV battery facility in Michigan, amid the ongoing shift in focus towards electric vehicles that has spurred a United Auto Workers protest against the car manufacturing giants Ford, GM, and Stellantis. Ford’s spokesperson, T.R. Reid, however, clarified that the ultimate fate of the facility remains undecided.

With the potential to become operational by 2026, the planned facility – spread across 950 acres near the town of Marshall in Southern Michigan – was estimated to provide employment to around 2,500 personnel. Ford had first disclosed these plans in February of last year.

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In an official email, Reid commented, “We’re pausing work and limiting spending on construction on the Marshall project until we’re confident about our ability to competitively operate the plant,” adding that the decision was influenced by an array of factors. However, the impact of the ongoing UAW contract discussions on this matter was left unclarified.

UAW President Shawn Fain, voicing his disappointment over the decision, deemed it as a masked attempt by Ford to shed jobs. Addressing the Big Three’s history of closing 65 plants in a span of two decades, he expressed his concerns through a social media statement. Positioning the need for a fair transition towards EVs, Fain criticized the threat of shuttering unopened facilities by Ford.

Amid the shift towards EV assembly, which requires substantially less labor as compared to petrol-powered vehicles, the union fears potential job cuts and reduced paychecks. This point of contention has become a primary focus during negotiations, calling for secured jobs.

The project attracted controversy over its dependence on Chinese technology as it was slated to build batteries leveraging “knowledge” and services provided by the Chinese company, Contemporary Amperex Technology Co., or CATL. Ford Motor Co., however, had plans to maintain sole ownership over the facility.

To further complicate the matter, the $430 billion Inflation Reduction Act (IRA) of last year proposes a restructured framework for allotting EV tax credits. This legislation rendered consumers eligible for tax credits if the vehicle, as well as related batteries and components, were manufactured and the battery minerals were sourced within U.S shores.

Notwithstanding the shelved Michigan project, Ford continues to construct additional plants in Kentucky and Tennessee in partnership with South Korea’s SK Innovations. With an aim to produce 2 million electric vehicles globally by late 2026, Ford’s mission towards electrification seems to go full throttle ahead.

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